What happened

Shares of bio-pharmaceutical company Innoviva (NASDAQ:INVA) fell as much as 17.4% on Wednesday. But the stock finished the trading day down 15.55%.

The stock's decline came just before Innoviva was scheduled to report its results for its third quarter. While there wasn't any specific news that seemed to drive the stock's decline, the timing of the sell-off indicates a large investor may have decided to sell a meaningful position just before earnings. Similarly, a large number of smaller investors may have happened to sell on the same day.

A chalkboard sketch of a chart showing a stock price falling

Image source: Getty Images.

So what

It's impossible to know exactly why the stock traded lower in these cases. But it looks as if shares recovered somewhat in after-hours trading, when Innoviva reported its third-quarter earnings. At the time of this writing, the stock is up 3% in after-hours trading. But there's no guarantee this rebound will hold.

Now what

Investors shouldn't read too closely into moves like these. Volatility -- especially for small-cap stocks like Innoviva -- happens from time to time for no specific reason.

Whether there's a reason for the stock's move or not, Innoviva reported total third-quarter revenue of $48.4 million and EPS of $0.21, up from $33 million and $0.13 in the year-ago quarter, respectively. Innoviva CEO Michael Aguiar called it a "very successful third quarter."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.